Mastering FX Markets: Unveiling Currency Risk Strategies in FINA 7360

Title: Navigating the FX Market: A Deep Dive into FINA 7360's Curriculum

Unraveling the FX Market Mysteries

What lies ahead in the journey of mastering foreign exchange (FX) markets? Let's delve into the tentative schedule for FINA 7360 to discover the secrets it holds.

Defining FX Rates and Market Dynamics

The course begins with an introduction to FX rates, their market dynamics, and the role of central banks in intervention. Asian markets' reaction to the Brazil crisis serves as a real-world example of these concepts.

Exchange Rate Determination and Forecasting

Understanding exchange rate determination is key, and this section covers the Interest Rate Parity Theorem (IRPT) and its variations. Furthermore, it delves into Purchasing Power Parity (PPP), the expectations hypothesis, structural models, and random walk hypotheses for forecasting in FX markets.

FX Risk Management and Hedging Strategies

Learn about hedging with FX futures, options, and exotic derivatives like ARCH models to manage currency risks. Nike Inc's exchange rate forecasting serves as a case study for these techniques.

Firm-Specific Hedging Tools and Economic Exposure Management

The course covers the classes of FX exposure, including transaction exposure, translation exposure, and economic exposure. Strategies for managing these exposures are discussed, with Tupperware Q2 Results (1998) offering a practical example.

International Asset Allocation, Equity Markets, and Performance Analysis

This section focuses on asset allocation strategies and risk-adjusted performance measures such as Sharpe, Treynor, RAROC, and Jensen Measures. The Global Mutual Fund Evaluation case study provides a practical application of these concepts.

Investing in International Equity Markets: Puzzles and Opportunities

Learn about country analysis, country risk, dual listing, comparative analysis, emerging markets, and the impact of the 1987 crash on international equity markets.